February 3, 2020
Qualified Opportunity Funds have been set up to fund Qualified Opportunity Zones and Qualified Opportunity Zone Businesses. One such QOF, the LGS Opportunity Zone fund, focuses on development and maintenance of indoor vertical urban neighborhood farms, grown and distributed by Local Grown Salads. The “farms” are being developed older buildings, situated in Baltimore, MD Opportunity Zones. According to the company’s website, four properties have been identified, to date, with the farms set up in 15,000-square-foot increments.
The product coming out of these businesses are packaged salads consisting of lettuce, cucumbers, chard, kale and others, which are sold to local restaurants and the community.
In a recent interview with OpportunityDB’s Jimmy Atkinson, Local Grown Salads Founder Zale Tabakman explained that Opportunity Zones and indoor vertical farming are a good combination because these operations can be set up in “food deserts,” lower-income areas where people have to drive, or take a bus long distances to get food to eat. Additionally, they are environmentally sound because the food grown isn’t using pesticides or fungicide, and little runoff. Tabakman also cited a carbon footprint reduction, pointing out that the locally grown food has less distance to travel than, say, produce from California to the East Coast.
Finally, these farms are set up to create local jobs. Tabakman indicated that each farm can create 25 jobs, with pay averaging around $15 per hour. Additionally, the company is working with the bank to ensure financial literacy for employees.
From Tabakman’s point of view, LSG’s vertical farms tick off the many boxes of Opportunity Zone investments, being located in the federally-designated areas, and providing a positive impact to the community. “Indoor vertical farming, because it’s food, is great . . . but any other product being produced locally really makes sense in an Opportunity Zone . . . especially when you need to be close to your customers,” he told Atkinson.
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